Safe Navigation and Global Environmental Protection to ... · coastal shipping business and...

Shinwa Kaiun Group CSR Report 2008Corporate Social Responsibility

Safe Navigation and Global Environmental Protection to Earn the Trust of Society

Shinwa Kaiun launched the first issue of "Shinwa Kaiun Kaisha,

Ltd. CSR Report" in 2006 to publicly disclose how the company

has been meeting its obligations while accomplishing the

international marine transportation services that are the company's

primary business objective. Starting in 2007, the CSR activities of

the Shinwa Kaiun Group as a whole are reported here, including

subsidaries running coastal shipping service and other related

business. Our editorial policy is to provide readers with an

understanding of how the company in the Shinwa Kaiun Group

engages in matters related to the stakeholders who have been

supporting it.

Editorial Policy

Message from the President

Corporate Philosophy

Group Outline

Social Report

The Shinwa Kaiun Group’s Approach to CSR

Stakeholders Supporting Shinwa Kaiun Group

Initiatives for Customers and Suppliers

Initiatives for Shareholders and Investors

Initiatives for Employees

Initiatives for Society

Environmental Report

Shinwa Kaiun Group Environmental Statement

Verification of Fiscal 2007 Implementation Plan and Fiscal 2008 Implementation Plan

Ensuring Safe Navigation

Preservation of the Marine Environment

Conservation of Air Quality

Resource Conservation and Waste Reduction

Environmental Education

Shinwa Kaiun's Environmental Protection Activities

Glossary

From Reader Questionnaire included inShinwa Kaiun Group CSR Report 2007

………………… 1

………………………… 1

………………………………… 2

… 3

… 4

……… 5

…… 6

……………………… 8

………………………… 10

… 11

… 12

…………………… 14

…… 16

………………… 17

… 18

…………………… 19

……………………………………… 20

……………………………………… 21

……… 21

Period CoveredApril 1, 2007 through March 31, 2008

Please note that some matters that fall outside this period are

also reported.

Organizations CoveredShinwa Kaiun Group and its related subsidiaries. 31 related

subsidiaries in the international marine transportation services

（8 domestic and 23 overseas）, 6 coastal shipping service

companies, and 6 other related services.

Previous issue: June 2007

Next issue: Scheduled for June 2009

contents

Other Shinwa Kaiun Publications

Shinwa Kaiun Group

CSR Report 2008

Corporate Social Responsibility

Ministry of the Environment,“Environmental Reporting Guidelines,

2007 version”

Referred Guidelines

① Corporate Brochure （in Japanese, English, and Chinese）② Annual and semi-annual reports （in Japanese）③ Annual and quarterly financial reports （in Japanese）④ Annual Report （in English）Copies of these publications can be requested from the

address below.

In addition to the publications listed under ①,②, and ④,various

kinds of information can be found on the Shinwa Kaiun website.

http://www.shinwaship.co.jp/

There is a questionnaire included with this report. Please take a moment to give us your honest opinion so that we can improve the content in future editions.

CSR Committee Secretariat

General Affairs Group

Shinwa Kaiun Kaisha, Ltd.

Tel: +81-3-5290-6233 Fax: +81-3-5290-6230

Shinwa Kaiun's Corporate Philosophy calls for the company to fulfill its

responsibility as a member of society and contribute to social development. This is the

basis of our business activities, and Shinwa Kaiun has been actively committed to

Corporate Social Responsibility (CSR) activities that are in line with the scope and

features of our core business, which is marine transportation services. Chief among

our concerns is the safety of maritime navigation. The Shinwa Kaiun Group places

this as a top priority for earning the trust of our customers and society as a whole,

because without this trust it is not possible for us to fulfill our responsibilities toward

each stakeholder, much less preserve the global environment.

In April 2008, we initiated our Medium-term Business Plan IV with the goal of

"pursuing sustained growth." The Shinwa Kaiun Group will act as a unit, striving to

achieve that goal. We are facing a harsh business environment, with the appreciation

of the yen and soaring overhead costs, but we will continue strengthening our

operational base and proactively fulfilling our social mission.

It is Shinwa Kaiun's earnest hope that this CSR Report will be of assistance to you in

understanding how the Shinwa Kaiun Group is responding to social demands.

August 2008

Since its establishment, Shinwa Kaiun Kaisha, Ltd., has been offerring marine transportation services that are safe, superior and meet clients' needs in oceans all over the globe. Shinwa Kaiun Kaisha, Ltd., will continue to be mindful of its role as a member of society and to be committed to the development of society through the introduction of transportation services that conform to evolving trends. We hereby establish our corporate philosophy.

Message from the President

Corporate Philosophy

1. Respond to all needs of clients and remain dedicated to the development of society

through provision of honest, credible, quality international maritime transportation services.

2. Nurture enterprising minds strong enough to succeed in international competition, thus

securing reasonable profit, and place importance on group management to increase the

value of the Shinwa Kaiun Group as a whole, while striving to build a corporation that

lives up to stockholders' expectations.

1 Social Mission

1. Strive to realize zero marine accidents and always prioritize safe navigation, playing a part

in conserving the global environment, which is the common property of all mankind.

2. Continue our training process to improve the operational skills of crew on vessels and

always endeavor to learn advanced technologies to cope with new demands.

2Safe Navigation andConservation of theGlobal Environment

1. Comply with the laws of Japan and international society, and as a member of society,

undertake fair and healthy corporate activities under ethical social norms.

2. Strictly reject any anti-social activities.

3Fair CorporateActivities

Disclose information on corporate activities in a timely and reasonable manner, actively

communicating with society. 4

Transparent InformationDisclosure

Respect the fundamental human rights of employees, and establish and maintain

democratic management.5

DemocraticManagement

Shinwa Kaiun Group CSR Report 2008 1

President

KAKEI Takahiko

Established October 27, 2000

Group Outline （as of March 31, 2008）

Head Office - 1 Consolidated Subsidiaries - 31Unconsolidated Subsidiaries （accounted for by the equity method） - 3Unconsolidated Subsidiaries （unaccounted for by the equity method） - 4Unaccounted-for Affiliates （by the equity method） - 4 （total 43）

458 （consolidated）

172 ships （consolidated）, 5,860,000 DWT

Shinwa Kaiun Kaisha, Ltd. （transportation of general cargo, ownership and related businesses）Shinwa Marine Corp. （ship management）International Marine Consulting Co., Ltd. （supervision of cargo operations）Shinwa Chartering Corp. （broker）Shinwa Agency Co., Ltd. （broker）Shinwa （U.K.） Ltd. （broker）Shinwa （U.S.A.） Inc. （broker）Shinwa Shipping （H.K.） Co., Ltd. （broker, agents）Shinwa（Singapore） Pte. Ltd. （International transportation）

Shinwa Naiko Kaiun Kaisha, Ltd. （transportation of general cargo）Shinwa Chemical Tanker Co., Ltd. （transportation of gas and chemical products）

Shinwa Systems Co., Ltd. （information processing）Shinwa Business Management Kaisha, Ltd. （general affairs and accounting agents, real estate management）Shinwa Engineering Services Co., Ltd. （maintenance of generators）

Number of Companies in Group

Number of employees

Fleet

Main companies engaged in international marine transportation business and associated services

Main companies engaged in coastal shipping business and associated services

Main companies engaged in other businesses

Overview of the Shinwa Kaiun Group

Overview of Shinwa Kaiun

Shinwa Kaiun Kaisha, Ltd.

KDDI Otemachi Bldg., No. 8-1, Otemachi 1-Chome, Chiyoda-ku, Tokyo, Japan 100-8108

April 1, 1950

International marine transportation services and related businesses

￥8,100,000,000

Tokyo （First Section）, Osaka （First Section）, Nagoya （First Section）, Fukuoka

154

91 ships, 5,680,000 DWT

Company name

Head office

Established

Principal lines of business

Capital

Stock market listings

Number of employees

Fleet

Revenues （consolidated）（Unit: ￥ million）

Coastal shipping business:15% （20,041）

Other businesses:1% （957）

International marinetransportation business:

84% （110,990）

Shinwa Kaiun Group CSR Report 20082

1. Corporate Social Responsibility is demonstrated by the way a company responds to the wishes and expectations of society.

2. In general, society expects a company to contribute through its core business （in the case of Shinwa Kaiun, international maritime transportation services supporting international trade） to a better quality of life, and to improvement in the operations of other enterprises and organizations. At the same time, society does not expect a company become caught up in a single-minded drive for economic efficiency or a runaway pursuit of profit in its core business, which can lead to corporate activities that have an adverse social effect and result in damage to the company's stakeholders. There have been a number of scandals involving other companies in recent years, and these have served to remind Shinwa Kaiun that a company must serve as a responsible part of society like any other member of the public.

3. CSR management seeks through efficient communication to win the understanding and trust of customers, suppliers, shareholders, employees, local communities, and other stakeholders for the company's activities, and to use various opinions and information in a continuous process of improvement, with the goal of increasing corporate value. This is the cornerstone of Shinwa Kaiun's management philosophy of interaction, and Shinwa Kaiun has been attempting to interact with society in cooperation with the Group's companies.

4. What makes it possible for Shinwa Kaiun Group to realize these goals is the steady corporate management structure, at the nucleus of which is the awareness of compliance in corporate activities to laws, company regulations and ethical norms. Based on this premise, competitiveness in corporate activities of a financial nature and the achievement of profitability, together with consideration of environmental burden reductions, and the forging of strong ties with civil society, are carried out. The Shinwa Kaiun Group is engaged in CSR activities that balance in corporate scale and characteristics.

The various aspects of, and reciprocal relationships among, the Shinwa Kaiun Group's CSR activities are shown below.

The Shinwa Kaiun Group's Approach to CSR

Social AspectsEmployment

（respect for human rights,employment of the elderly）

Workplace（personnel system, hiring, training, occupational safety and healthcare）

Information disclosure（IR, PR, safeguarding of personal data）

Cooperation with regional society（joint disaster response）Social contributions and

cultural support（donations）

Economic AspectsImproving performance

Cost control（conservation of fuel）

Improving customer satisfactionQuality management （safe navigation）

Managing customer informationTaxes

Environmental AspectsEnvironmental protection

（prevention of marine pollution）Procurement of environmentally

friendly materials Emergency response

（clean up of polluted environment）Preservation of biodiversity（selection of hull coatings）

Management StructureCompliance-based management structure（awareness of regulatory compliance）

Corporate governance（administrative organizations）

Internal control（directional communication function,

supervision function,risk management）

Social Report



Stakeholders Supporting Shinwa Kaiun Group

So

ci

al

R

ep

or

t

Shinwa Kaiun Group's business is supported by a large number of stakeholders,

including various maritime personnel, the government offices concerned,

calling/passing port states, and local communities.

●General consumers and civil society　●Port states and coastal states on ship's route 　　　　　　　　　　　　　　　　　　　　　　　（states that include Malacca Straits, Panama Canal, Suez Canal, and so on）

●Cargo owners（Steel mills, power stations, oil refineries, other manufacturing plants and trading companies）

●Shipping exchanges

●Ship brokers（London, New York, Tokyo）

●Cargo brokers and agents

●Warehouse companies

Ties with customers

●Auditors

●Marine surveyors

●Courts in various countries

●Marine arbitration　（London, New York, Tokyo）

●Educational institutions

●Organizations such as 　the Japanese 　Shipowners' Association

●Ship owners

●Shipyards

●Classification societies

●Marine insurance companies

●Salvage companies

●Financial institutions

●Manning agents　（The Philippines and other countries）

●Ship management companies

●Spare ship parts 　and chandlery suppliers

●Shipping agents

●Fuel suppliers

●Stevedoring companies

●Pilots' associations and 　tugboat companies

Operator work-relatedpartners

Other Stakeholders

Source: Website of the Japan Coast Guard

●Ministry of Land,　Infrastructure and Transport

●Japan Meteorological Agency

●Japan Coast Guard

●Marine Accident Inquiry Agency

●Port authorities

●Customs

●International organizations　（such as the IMO）

●Flag state administrative 　organizations 　（Japan, Panama, Liberia, etc.）

Maritime authorities

Shinwa KaiunGroup

Shareholders and investors

Owner work-related partners


Pipe loading state

Initiatives for Customers and Suppliers

Customer Satisfaction

Ensuring Safety and Quality in Transport Services (ISO 9001)

The Shinwa Kaiun Group's mission is to supply customers with safe and reliable

quality transportation services. Shinwa Marine Corporation has established a quality

management system, and has received ISO 9001:2000 certification in ship

management operations.

Participation in Safety Meetings with Customers and Partners

International Marine Consulting Co., Ltd., makes use of experienced captains to

supervise cargo loading/discharging operations, including cargo such as high-value

steel products. The company supports efficient transportation and preservation of

cargo, utilizing its extensive accumulated experience and knowledge of cargo

characteristics and worldwide port information.

Efficient Handling and Preserving Cargo

So

ci

al

R

ep

or

t

Simulated press conferences duringEmergency Response Exercise

ISO 9001: 2000 registration certificate

Shinwa Kaiun has been principally engaged in worldwide logistics of raw materials,

energy resources and products for industries. The company meets its customers'

needs for cargo transportation throughout the world by fully utilizing information of

trade, vessels, shipping routes and cargo handling know-how accumulated over a

long period at its bases in London, New York, and Tokyo, where many shipbrokers

are located, and strives to offer timely shipment in the most appropriate vessels,

safely and at competitive freight rates.

The style of business communication by which the company pays direct visits to

domestic and overseas customers becomes the foundation of relationships of trust.

Regardless of whether a project is long-term or a spot voyage, the company strives

to generate customer satisfaction, build trust, and increase opportunities for its

customers worldwide to do business with "a first-class industrial bulk carrier."

Shinwa Kaiun, together with coastal shipping body Shinwa Naiko Kaiun Kaisha, Ltd.,

and Shinwa Chemical Tanker Co., Ltd., has continued to forge strong ties with the

domestic consignees of various industries such as steel mills, power stations, oil

refineries, gas plants and other port-related personnel, and has participated in many

safety conferences all over Japan to ensure the safety of ships entering/leaving port

and the safety of the region, has cooperated in periodic surveys, and has implemented

risk management programs related to accidents, disasters and environmental pollution.

According to a series of emergency measures based on regulations regarding the

handling of disasters at sea and other emergency circumstances, Shinwa Kaiun is

ready to respond to an emergency situation jointly with customers, salvors, insurers,

shipping agents, shipyards and other partners, and related disaster prevention

agencies. The company is also prepared to offer explanations at appropriate times to

the public and concerned parties through media and the company's website.

Emergency Response Exercise and Explanations to Outside Parties

Initiatives for Shareholders and Investors

Investor information on the company's website

Top page of the company’s website

6

So

ci

al

R

ep

or

t

Fiscal year 2005 was the first year of Shinwa Kaiun's commitment to Medium-term

Business Plan III, a three-year plan with the goal of "enhancement of the operating

base for the next stage." That plan concluded at the end of March 2008. The shipping

business has enjoyed steep rises in rates due to rapid economic growth in emerging

economies and the unprecedented expansion of shipping demand that has

accompanied that growth. In part because of our efforts to overcome business

challenges, profit levels posted new historic highs and net assets at the end of the last

term had more than doubled over the past three years.

In April 2008, we began Medium-term Business Plan IV with the goal of "pursuing

sustained growth." The Shinwa Kaiun Group is united in the commitment to

strengthening and expanding our operational base, securing and educating qualified

staff and increasing group-wide management efficiency,strengthening ship

management functions and promoting environmental conservation, and improving our

financial standing and enhancing management transparency.

Medium-term Business Plan IV

Shinwa Kaiun endeavors to ensure the timely and appropriate disclosure of

investor-relations information through timely release to shareholders and investors of

important corporate information that can have an effect on results. The information is

disclosed on the websites of the Tokyo, Osaka, Nagoya, and Fukuoka stock

exchanges, through the mass media, and on Shinwa Kaiun's website.

In addition, the company's Investor Relations Committee, which is composed of the

directors in charge of the General Affairs Group, Finance and Accounting Group, and

Project Group, as well as the managers of those groups, has formulated a public

relations policy governing the release of information intended for investors. This

committee is charged with responding to media coverage, holding press

conferences, and posting articles on the company's website.

Timely Disclosure of Company Information

Shinwa Kaiun works to provide information to domestic and overseas institutional

investors. As far as possible, the company holds individual briefings with securities

analysts upon request, answering questions and explaining the status of operations.

In accordance with a policy established by the Investor Relations Committee, at least

one director and one administrative officer participate in these briefings. Twenty-eight

such individual briefings were held in fiscal year 2007.

Interactive Communication

Shinwa Kaiun promotes fleet cost-competitiveness, and retains part of its profits

internally as a hedge against fluctuations in shipping market conditions, currency

exchange rate, bunker oil price, and other such costs. These measures are intended

to reinforce corporate structure while offering stable and continuous redistribution of

profits to shareholders. For this reason, Shinwa Kaiun has made a dividend payout

ratio of approximately 20% （on a non-consolidated basis） a matter of dividend

policy. For fiscal year 2007, Shinwa Kaiun has declared an interim dividend of ¥7 per

share, and a year-end dividend of ¥9 per share.

Returning Profit to Shareholders



So

ci

al

R

ep

or

t

Shinwa Kaiun employs the corporate auditor system, and also strives to improve

management efficiency by holding the board of directors to 10 or fewer directors, each with

considerable expertise in Shinwa Kaiun’s business. In June 2007, Shinwa Kaiun introduced an

executive director system in order to address changes in the management environment

appropriately and precisely. The company has four corporate auditors, of whom three are

outside auditors. Each corporate auditor attends meetings of the Board of Directors, the

Board of Executive Directors, the Compliance Committee, and other committees of various

kinds, and audits the status of operations. Shinwa Kaiun also established an internal audit

office in July 2006 for the purpose of contributing to risk management and supporting the

evaluation of internal controls in accordance with Japan’s Companies Act and the Financial

Instruments and Exchange Act. Acting by order of the president, the internal audit office

conducts internal audits of operations in every division, working in cooperation with the

corporate auditors to enhance the effectiveness of corporate governance.

Corporate Governance

Shinwa Kaiun has established standards of conduct that articulate the practical implications

of its corporate philosophy. In addition, in order to advance compliance the company has

established a Compliance Committee chaired by the director in charge of the General

Affairs Group. This committee's mandate is to ensure that each director, corporate auditor

and employee complies with legal statutes, company regulations, and ethical standards in

the execution of operations, and to heighten awareness of these issues.

In accordance with Japan's Company Law and its Enforcement Ordinance, the Board of Directors

has established a basic internal control policy, while also working to ensure reliability of financial

reports in accordance with the provisions of the Financial Instruments and Exchange Act.

Compliance and the Company's Internal Controls System

（Fiscal year）

（Fiscal year）Ordinary income Net income

250

200

150

100

50

（Unit: ￥ billion）Ordinary income and net income （consolidated）

02003 2004 2005 2006

4020

111

74

104

54

2007

146

89

161

219

1,400

1,200

1,000

800

600

400

200

（Unit: ￥ billion） Revenues （consolidated）

02003

726

2004 2005

819

936

2006

1,056

1,320

2007

Total assets and net assets（consolidated）（Unit: ￥ billion）

Total assets Net assets

611690

772

1,083

147215

265

381472

846

0

200

400

600

800

1,000

1,200

2003 2004 2005 2006 2007（End of fiscal year）

1,600

1,400

1,200

1,000

800

600

400

200

0

Movement of Shinwa Kaiun's share price（Unit: Yen）

April 20

06

July

2006

Octo

ber 200

6

April 20

07

Januar

y 200

7

July

2007

Octo

ber 200

7

Januar

y 200

8

April 20

08

Project Team

Organization Chart

CAPSS Execution Management CommitteeBudget Committee

Vaious CommitteesCSR Committee

Compliance CommitteeSafety and Health CommitteeInvestor Relations CommitteeSafety and Environmental CommitteeDisaster Prevention and Countermeasures CommitteeGeneral Systems Planning Committee

President Executive Officer

Attorneys

Internal Audit Office

Directors in charge

GeneralAffairsGroup

GL Committee （Note）

ExecutiveOfficers

Executives andemployees of

company divisions,Overseas offices,

Ships

Subsidiaries

Elections ElectionsOperational auditAudit of accounts

Audit of accounts

Exchange of opinions

Internal audit

Assistanceandcoordination

Assistance in monitoring control operations

（Internal Control Secretariat）

Supervision

Supervision

Supervision

Report

Suggestions / Recommendations

Independent Public Accountants（Auditing firm）

Elections

Note: Composed of the company's group leaders

As of June 27, 2008

Board of Executive Officers

Board of DirectorsBasic Internal Control Policy

Supervision （Resolutions）

General Shareholders' Meeting

Board of Corporate Auditors

Director in charge of Internal Controls

and Corporate Ethics

Co-op

eration

Co-op

eration

Assistance

Assistance

The staff of Shinwa （Singapore） Pte. Ltd.together with Almanac staff

Initiatives for Employees

Shipboard training for new employees

Training on how to use self-contained breathing apparatus on board the ship

Officer training

There is a fundamental assumption that core staff, both administrative and technical, are permanent employees. In the spirit of Japan's Law on Securing Equal Opportunity and Treatment between Men and Women in Employment, hiring is based only on the aptitude and capabilities of each individual, and the growth of employees is fostered by the company's training system. We also strive to foster the capabilities of our non-Japanese crew and staff through expanded education and training programs that qualify them to occupy officer positions and to maintain long-term on-board careers on vessels managed by the Shinwa Kaiun Group.

Basic Employment Policy

In fiscal year 2001, Shinwa Kaiun introduced a personnel system under which promotion and advancement depend upon the individual's ability, motivation and performance. Since its introduction, the company has fine-tuned the system based on the opinion of employees. This system has the primary aim of meeting each individual at his or her current level of competence, and further developing his or her abilities as well as ensuring fair treatment. There are three career tracks for permanent employees: main career track, preparatory career track, and general employee. The path to advancement can open depending on the individual’s motivation and ability, and 10 general employees had transferred to the preparatory career track as of April 1, 2008. Also, a specialist career system （for employees possessing specialized knowledge and working in technical fields） and a re-employment system （for seniors possessing extensive work experience） was introduced in 2006. These systems have already proved to be successful.

Personnel System

To develop new employees into professionals in the field of international shipping, Shinwa Kaiun provides training tailored for the career track and rank, with on-the-job training being the core of this training system. The company also offers training for new employees, training in shipping practice, languages（English and Chinese）, personal computers, domestic agency matters, boarding, and overseas administrative requirements, as well as stratified training and training for specific jobs. These provide each individual with various opportunities for progress, according to their position and requirements.In accordance with the company's plan for quickly training young crew, exacting guidance and education is provided, allowing new employees to qualify as chief officer or first engineer in just three to four years after joining the company.Non-Japanese crew-member qualification support systems are available, in which participants receive pre-boarding training in the country where they were hired, and in Tokyo, classroom training, assistance in obtaining advanced ship officer certifications, and OJT.

Training System

All employees of the Shinwa Kaiun Group receive annual health checkups, and the company bears the expense of comprehensive physical examinations for employees who satisfy the requisite conditions. The head office also has a special Industrial Hygiene Office where an industrial physician and an administrator with nursing qualifications offer physical and mental health consultations and guidance on a regular basis. Activities implemented in fiscal year 2007 included influenza prevention, information on sales of over-the-counter medicines at lower prices, and mental health checkups.Safety is the top priority at sea, and the company has established and is thoroughly implementing a safety management system. In the unlikely event of an employee accident, compensations greater than those required by Japanese law are in place.

Employee Health and Safety

So

ci

al

R

ep

or

t


Regulations for handling compliance consultationsTo facilitate consultation for employees on matters related to compliance in line with the goal of protecting individuals who report company information of public interest, a consultation service guided by an outside lawyer has been arranged in addition to the conventional in-house compliance adviser, and its regulations were established in July 2006. There were no cases for consultation in fiscal year 2007.

A flower arrangement activity

Shinwa Kaiun appropriately controls information that can identify individuals, such as data on its employees, for the purpose of safeguarding private data. It adopts the policy of not offering personal data to any third party unless permitted to do so by law or when approval has been obtained from the individuals themselves. The data is only used for the purpose for which it is intended. In August 2006, regulations for appropriate control of personal data were established and disseminated to all companies in the Shinwa Kaiun Group as Compliance Regulations. There were no cases of claims in fiscal year 2007.

Appropriate Management of Personal Data

The Company maintains a friendly working environment based on the spirit of the Law on Securing Equal Opportunity and Treatment between Men and Women in Employment. To ensure that both male and female employees demonstrate their capabilities to the fullest extent, in addition to adhering to company rules and standards of conduct, guidelines for preventing sexual harassment have been established and these guidelines have been brought to the attention of all employees since April 2007 and have also been disseminated throughout the companies of the Shinwa Group.

Guidelines for Preventing Sexual Harassment

Shinwa Kaiun strives to create a congenial work environment so that its employees can maintain a good balance between work and home and lead a satisfactory life. The company offers a secure environment for working mothers, maternity leave, family-care leave, and other benefits more generously than required by law, and allows employees that satisfy conditions such as continuous service and age to take sabbaticals. The company provides dormitories, company housing, an employee savings system, a housing loan interest supplementation system, and various other welfare and benefit programs, in addition to which it helps fund employee groups that engage in cultural activities （including sports）. In April 2008, Shinwa Kaiun also introduced lump-sum child-rearing support payments.

Work-Life Balance

Shinwa Kaiun's shore-side employees belong to the Shinwa Kaiun Labor Union, and its seagoing employees belong to the All Japan Seamen's Union. Shinwa Kaiun enjoys relationships of amity and trust with both of these unions.

Relations with Labor Unions

There is no child labor or forced labor practiced anywhere in Shinwa Kaiun or the Group companies.

Child Labor and Forced Labor

photocopies and to print on both sides of the paper, and providing general business information and hints for upgrading business manners and office skills on the in-house LAN. For environmental and social concerns, we make proposals for separation of trash, review stationery use, unify tea dispensers, check emergency packs, and so on. Furthermore,we provide stamps, cards, and other supplies for volunteer groups, and collect the caps from plastic bottles in cooperation with organizations that purchase vaccines for children around the world. In fiscal year 2008, our members will be taking the Certif ication Test for Environmental Specialists （Eco Test） held by the Tokyo Chamber of Commerce and Industry. We will acquire a broad knowledge of the environment, and hope to put it to use in resolving everyday environmental issues. Please feel free to let us know if you have any views or suggestions, even on the smallest everyday matters. We'll do what we can right where we are!

So

ci

al

R

ep

or

t

Ladies' CAPSS is a business improvement program implemented by female employees starting in January 2000. We are carrying on act iv i t ies to reduce expenses, improve

operational efficiency, maintain the workplace environment, protect the environment, and so on, working from a woman's perspective with a focus on tackling solutions that are accessible to us. We have members from a wide range of age groups and work assignments in the Shinwa Kaiun Group, and we share information and our opinions with each other. Specifically, our activities include urging people to use backing sheets when making

INTERVIEW

Doing What We Can Where We AreGeneral Affairs Group Secretary / Personnel Team

Yoriko Maseda


About a year has passed since Ms.Inoue came back from her maternity leave. She is actively involved in shipping operations, just as she was before taking pregnancy leave and maternity leave, and is currently using shortened work hours to get off at 16:15, an hour earlier than normal work hours.

Maternity Leave andShortened Hours of Work

Panamax Team, Coal/Bulk Carrier Group,

Kaoru Inoue

Plastic bottle cap collecting box

A fire drill at the KDDI Otemachi Building（Experiencing a smoke-filled environment）

A performance at the Kioi Hall

Employees participating as Marunouchi Fire Brigade Volunteers and performing water-discharge drills.

Graduation ceremony for scholars of the Philippine Merchant Marine Academy

The policy of the company is to continue providing support for disaster recovery not

only in Japan, but also around the world, based on the relations formed in the course

of international maritime transportation services, as well as those formed with the

community. In fiscal year 2007, the company contributed funds to the victims of the

mid-Niigata Prefecture earthquake and of the cyclone in Bangladesh.

Support for Disaster Recovery Operations

The companies of the Shinwa Kaiun Group, headquartered in the KDDI Otemachi

Building （Chiyoda-ku, Tokyo）, belong to the joint disaster prevention council for the

building, through which they are actively engaged in fire drills and other joint regional

disaster prevention programs. In addition, an in-house security and fire brigade has

been organized within the Shinwa Kaiun Group to promote crime and disaster

prevention inspections and education at the company's offices for both executives

and employees.

Moreover, the company treats activities of employees participating in the office area's

"Marunouchi Volunteer Fire Brigade" as part of the company's regular work hours.

Joint Regional Disaster Prevention Programs

Through the Nippon Steel Arts Foundation, Shinwa Kaiun contributes to Japan's

cultural development by cosponsoring musical programs at Kioi Hall.

Support for Culture

The company provides scholarship funds to Philippine Merchant Marine Academy

（PMMA） and Maritime Academy of Asia and the Pacific （MAAP） students to

support future leaders in international maritime transport.

Scholarship System

Under the U.S. search and rescue system, when a question of rescue arises, the

closest vessel is requested to perform the rescue. For this reason, vessels under the

management of Shinwa Kaiun participate in AMVER, a computer-based voluntary

global ship-reporting system.

Japan has JASREP, which is a similar type of system, and all vessels under the

management of Shinwa Kaiun participate in this system as well.

Rescue

Weather charts published by the Japan Meteorological Agency and other

organizations draw on data from surface, satellite, and shipboard observations.

Correct information on weather and sea conditions is indispensable to safe

navigation. Vessels under the management of Shinwa Kaiun are actively involved in

reporting meteorological information.

Reporting of Meteorological Information

So

ci

al

R

ep

or

t

Initiatives for Society


Shinwa Kaiun Kaisha, Ltd., and its Group companies will strive to maintain a healthy global environment - the common property of all mankind - as a marine transportation corporate group providing services in worldwide waters.

Basic Ideology

1. We recognize that a marine accident can cause huge damage to the environment； for example, marine pollution from an oil spill. We will strive to realize zero marine perils and always remember safe navigation.

2. We will not only comply with laws and regulations concerning the environment, but also will establish our own criteria when necessary, and strive to reduce the burden on the environment.

3. We will establish environmental objectives and targets considering the environmental impact brought about by marine transportation services, and improve environmental preservation activities continually.

4. We will perform for energy-saving navigation and develop the technologies for improving it.

5. We will choose environmentally sound supplies when acquiring vessels, instruments, materials, and other products.

6. We will promote resource saving in all corporate activities, including those in land offices, as well as reducing the amount of waste generated by all facilities.

7. We will raise employees' awareness of environmental issues through environmental education and in-house promotional activities.

8. We will make public announcements of environmental preservation activities periodically.

（Established on October 26, 2001）（Revised on December 17, 2004）

Environmental Policies

Shinwa Kaiun Group Environmental Statement

Environmental Report


Verification of Fiscal 2007 Implementation Plan EnvironmentalManagement

Programs

En

vi

ro

nm

en

ta

l

Re

po

rt


Promotion of

Safe Operation

Preservation of the M

arine Environment

Conservation of

Natural Resources

Reduction ofW

aste Generation

Reduction of Harm

fulA

ir PollutantsProm

oting anEnvironm

ental Mind

Natural Resource Saving and

Reduction of Waste

Conservation of

Air Q

ualityEnvironm

entalEducation

EnvironmentalPolicies

EnvironmentalObjectives Target for 2007

PLAN ⇒ DO ⇒ CHECK / ACT ⇒

Content of Activities Verification of Results

Zero accidental oil spills from ships

Complete exchange of ballast water in the ocean

10% reduction in fuel oil consumption per unit load over fiscal year 1990

Implement measures to conserve fuel

Reduct ion in the quant i t y of cy l inder lubricating oil

Reduction in consumption of paper

1% reduction in annual power consumption in the office over the previous year

Improve landing shipboard waste （1% increase over the previous year）

Complete segregation of wastes generated in the office （100％）

10% reduction in NOx emissions per unit load over fiscal year 1990

10% reduction in CO2 emissions per unit load over fiscal year 1990

Supply low-sulphur fuel （sulphur below 4.5%）

Reduction of dioxin

Adoption of alternative CFC refrigeration equipment for newly built ships （100%）

Education of shore employees

Education of crew

・Compliance with procedures for receiving/ transferring fuel oil and lubricating oil ・Compliance with regulations for preventing oil pollution

・Recommendation to install oil-absorbing filter on deck・Instruction in prevention of oil-spill accidents

・Set forth in sailing instructions・Compliance with procedure for changing ballast water

・Improving propulsion efficiency by bottom cleaning and propeller polishing

・Preparing effective operational plans・Increasing loading cargo quantity

・Appropriate implementation of economic operations・Instruction in reducing fuel-oil consumption in port

・Promote installation of equipment for reducing consumption of main engine cylinder lubricating oil

・Improve electronic library・Promote the use of backing paper

・Promoting paperless operations by introducing onboard vessel-management software

・Notices on in-house electronic bulletin board・Saving electricity from unnecessary lighting

・Recovery and reuse of supplied lashing materials・Completely segregated collection and retention・Management of quantity of shipboard waste and

landing

・Complete segregation of recyclables, combustibles and non-combustibles

・Adoption of improved machinery on newly built ships

・Selection and analysis of fuel oil to be purchased

・Adoption of incinerators of IMO-approved type on newly built ships

・Adoption of alternative CFC （R404a） in refrigeration equipment and air conditioning systems for newly built ships

・Practice in-house seminar

・Practice pre-boarding seminar・Practice training at overseas companies・Practice shipboard education for crew

・Achieved zero accidental oil spills through compliance with regulations and procedures together with widespread awareness through sailing instructions

・Set forth in sailing instructions and conducted in compliance with procedure for changing ballast water

・Reduced 10.57% relative to fiscal year 1990 by car r y ing out complete hu l l c lean ing and prope l le r po l ish ing in dr y-docks, and by reducing ballast voyages to the minimum and increasing cargo volume to the maximum

・Study and reevaluate economic operations on the basis of shipping plans and issue instructions to sail at economic speed to conserve fuel. Fuel conservation is being implemented by reducing on-board power use in ships at anchor

・Not achieved because the equipment could not be installed on one out of two ships in dry-docks

・Reduced consumption by approximately 12% compared to the prev ious f isca l year by promoting paperless operation through improved preparation of informational materials and effective use of shipping management software

・The target was not met as power consumption rose over 1% from the previous fiscal year because of increased use of computers and air conditioning resulting from the growth in operations caused by active sales expansion

・Targets for on-shore disposal of on-board waste were met as follows:Fiscal year 2006 results: 12.8 m3 and 109.1 kgFiscal year 2007 results: 18.8 m3 and 279.7 kg

・Program for proper separation of waste material generated in our offices is being coordinated with office managers

・A reduction of 10.54% relative to fiscal year 1990

・Sulphur content of all fuel oil is 4.5% or lower

・Fitted on all newly built ships

・Fitted on all newly built ships

・Implemented in new employee training and in meetings in each department

・Conducted pre-boarding training and on-board education

and Fiscal 2008 Implementation Plan

En

vi

ro

nm

en

ta

l

Re

po

rt


PLAN ⇒ DO ⇒

Target for 2008 Content of Activities TermAchieved

： Achieved ： Partly achieved ： Need review

Zero accidental oil spills from ships

Complete exchange of ballast water in the ocean

11% reduction in fuel oil consumption per unit load over fiscal 1990

Reduction in the quantity of cylinder lubricating oil

Reduction in consumption of paper

1% reduction in annual power consumption in the office over the previous year

Improve landing shipboard waste（1% increase over the previous year）

Complete segregation of wastes generated in the office （100％）

11% reduction in NOx emissions per unit load over fiscal year 1990

11% reduction in CO2 emissions per unit load over fiscal year 1990

Supply low-sulphur fuel

Reduction of dioxin

Implemented GREEN FLAG INCENTIVE PROGRAM （100%） in vessel placed in service at Long Beach Harbor in the United States

Education of shore employees

Education of crew

・Compliance with procedures for receiving/ transferring fuel oil and lubricating oil・Compliance with regulations for preventing oil pollution

・Recommendation to install oil-absorbing filter on deck

・Instruction in prevention of oil-spill accidents

・Set forth in sailing instructions

・Compliance with procedure for changing ballast water

・Preparing effective operational plans・Increasing loading cargo quantity・Appropriate implementation of economic operations・Instruction in reducing fuel-oil consumption in port

・Promote use of fuel additives

・Promote installation of equipment for reducing consumption of M/E cylinder lubricator oil （covers three newly built ships）

・Improve electronic library・Promote the use of backing paper

・Promoting paperless operations by introducing onboard vessel-management software

・Notices on in-house electronic bulletin board・Saving electricity from unnecessary lighting

・Recovery and reuse of supplied lashing materials・Completely segregated collection and retention・Management of quantity of shipboard waste and landing

・Complete segregation of recyclables, combustibles and non-combustibles

・Adoption of improved machinery on newly built ships

・Select and analyze fuel with 4.5% or lower sulphur content to purchase・Select and analyze fuel with 1.5% or lower sulphur content to

purchase when entering an SOx Emission Control Area （SECA）

・Adoption of incinerators of IMO-approved type on newly built ships

・Sail at 12 knots or less within 20 miles of applicable ports

・Practice in-house seminar・Train internal environmental auditors

・Practice pre-boarding seminar・Practice training at overseas companies・Practice shipboard education for crew

Fullyear

Fullyear

Fullyear

Fullyear

Fullyear

Fullyear

Fullyear

Fullyear

Fullyear

Fullyear

Fullyear

Fullyear

Fullyear

Fullyear

Fullyear

Fullyear

Fullyear

Fullyear

En

vi

ro

nm

en

ta

l

Re

po

rt

External ship inspection

Shipboard drills

Ensuring Safe Navigation

For Shinwa Kaiun, safe operation is one of the most important issues bearing on protection of the environment, and of the marine environment in particular. Shinwa Marine Corp., advanced marine experts in ship management, manages all of the ships owned by the company. It established and implemented the safety management system （SMS）, and has made continuous ef forts to maintain and improve it, in order to ensure safety at sea, prevent fatal accidents, and avoid environmental damage, especially to the ocean, as well as damage to property, with the objective of of fering highly reliable services that meet customer needs.

Maintenance and Improvement of Safety Management System by In-house Ship Management Company

One of the programs Shinwa Kaiun uses to ensure the safe operation of the ships it operates is the annual inspection of each vessel owned or operated by the company, based on its own checklist, carried out by Shinwa Marine Corp.The superintendent of the ship management group pays visits to all ships every six months to check their condition, provide guidance to the crew, and confirm that the ship maintenance plan is being carried out. This is in addition to the annual check for quality control and safety management. We also carry out inspections of time-charter ships in accordance with our standard checklist to maintain the safety level of our entire fleet in cooperation with the ships' owners and management companies.

Ship Inspections

For promotion of safe operation and environmental conservation, the Safety & Environmental Committee is assembled on a regular basis, with the president serving as the chairman （see the diagram on page 7 and the organization chart on page 20）. The committee discusses issues of safe operational management from various perspectives, including research and analysis of marine dangers, planning of prevention measures, establishment of risk management systems, and seamen's education and training.

Safety and Environmental Committee

Based on studies and analysis of accidents that have actually occurred, effective management measures to prevent accidents beforehand are being formulated, and to implement these, the Accident Zero Achievement Committee meets on a regular basis. The minutes of the committee meetings are sent to all ships under management, and play a useful role in shipboard education.

Accident Zero Achievement Committee

The basic policy related to safe navigation of ships operated by the Shinwa Group, as well as environmental protection and its various prerequisite issues （ issues related to ship management, operations management, and risk management response）, are deliberated from the perspectives of the entire Shinwa Group, and proposed to each company in the Group. The Shinwa Kaiun Group Safe Operation Management Committee meets regularly to ensure that each company is provided an opportunity to reflect the contents of the proposal in its management policies, and that safe navigation is thoroughly implemented.The committee membership includes the persons in charge of planning and safe navigation from Shinwa Kaiun Kaisha, Ltd., Shinwa Naiko Kaiun Kaisha, Ltd., Shinwa Chemical Tanker Co., Ltd., and Shinwa Marine Corp. The chair is held by the Director of the Marine and Safety Management Group of Shinwa Kaiun Kaisha, Ltd.

Shinwa Kaiun Group Safe Operation Management Committee


En

vi

ro

nm

en

ta

l

Re

po

rt

KYT training for crew members while on leave

Let me first introduce myself and outline my career as a seafarer:I am Zoilo H. Paa, Marine Chief Engineer. After graduating from PMMA in 1987, I joined various kinds of vessels and worked on board with different kinds of nationalities（British, French, Indians, Dominican Republicans, Taiwanese and Chinese）.I spent nearly two decades in seafaring.I worked on board Shinwa Vessels from 2000 to 2006, from 2nd Asst. Engineer up to Chief Engineer, and star ted work here at SMC as technical superintendent last September 2006.

Mingling with Shinwa Marine Japanese staff is not very difficult for me because I had experienced sail ing with senior of f ice rs tw ice（ two contracts）,and c o m m u n i c a t i o n i s n o t a p ro b l e m b e c a u s e m o s t o f t h e s t a f f c a n communicate in English.Working in Japan is a very di f ferent f rom to being a Chief Engineer on a Vessel. On board, your workplace is just below your cabin; it is just a few meters below, which you can reach in one minute or less i f you are lucky enough to be ass igned on a vesse l equipped with elevator.

INTERVIEW

Putting Experience to Good Use

The "K" in KYT stands for the Japanese kiken, which means hazard, "Y" stands for yochi, which means recognition, and "T" stands for training. The purpose of KYT is to heighten crew members' sensitivity to danger in order to prevent disaster. KYT is an old familiar term for Japanese marine experts, but it has practically fallen out of use in recent years as the presence of non-Japanese crew members has increased. Therefore we are reinforcing the KYT movement to heighten safety awareness among the crew and to reestabl ish the KYT approach as a shipboard presence. An introduction to the KYT method is given below.

①Implementing the point and call safety check routineBefore performing some work operation, we point a finger at the work object and call out in a loud voice, "XX – OK!" This brings the eyes, the finger, and the voice to bear on the object being checked to ensure safety.②Four-round KYT

Pre-work meetings are held, divided into four rounds in a method that makes all the workers grasp the dangers efficiently and quickly.Round 1: Grasp the current situation: Talk over the dangers latent in today's work.Round 2: Look into the essence: Focus on key danger items.Round 3: Set up countermeasures: Talk about countermeasures for key danger items.Round 4: Set targets: Set targets for work activity and decide on a slogan.③Strict enforcement of touch and call

This is a way of reinforcing teamwork. The team members all put their left hands together and recite the slogan decided in Round 4 three times in unison, followed by "Touch and call, Zero Accident OK."

KYT Approach

Compare that to 1 hour 20 minutes （door-to-door） and riding in a very crowded train; that is a small sacrifice on my part. Of course there are advantages and disadvantages to ship and office work, especially here in the Land of the Rising Sun.It is an honor and privilege for me to join the Shinwa Marine-Ship Management Group. Becoming a Superintendent is a very challenging job: you have to manage allotted RESOURCES, TIME and most especially PEOPLE. And you must always be interconnected; otherwise it is very difficult to achieve your goal of becoming a successful Superintendent. Also, you have to make quick decisions to satisfy the owners so that there are no delays in the business. I am in the process of continuous learning, thanks to my colleagues. I do appreciate all the knowledge imparted to me by my colleagues, especially my Group Leader, Mr. K. Ishikawa, whose patience and understanding are UNLIMITED. Thank you, sir.I am confident that by working closely together as a team, sharing fundamental and essential ideas, we will attain our common goal of progress, not only for ourselves but for the company as a whole.I be l i eve E XPERIENCE wi l l teach me more and make a lot of difference!I am also preparing myself to transfer to PSSI（Philippine Standard Shipmanagement Inc.）in the near future, because I bel ieve that through personnel exchanges we develop a good atmosphere of working together to fulfill the company's vision…PROGRESS.Somebody asked me if a seafaring career is already set aside …Well, time will TELL!


Ship Management Group, Shinwa Marine Corp.

Zoilo H. Paa

Preservation of the Marine Environment

Disposal of Bilge and Waste Oil from the Engine Room

Onboardincineration

Discharge fromthe ship

Bilge

Oil/water separator

Oil

Wat

er

Ballast waterfilled in port

Ballast water management

Ballast waterexchangedin the ocean

Wastewater containing oil generated in the engine room is called "bilge." The bilge

is processed with our special filtration system before it is discharged overboard in

those areas of the ocean where this is allowed, ensuring that only water without oil

is discharged. This system is called an oil/water separator. The water discharged

overboard is constantly monitored with an oil sensor, and the discharge stops

automatically when the system detects any oil.

We perform maintenance on these systems at regular intervals and pay close

attention to the bilge discharge. The removed oil is burned onboard as waste oil or

may be taken ashore for disposal.

Disposal of Bilge and Waste Oil from the Engine Room

Air-seal Stern Tube Sealing System

LubricantAir seal equipment

Stern tube

A stern tube sealing system prevents the ingress of seawater from around the

propeller shaft, concurrently preventing the leakage of lubricating oil used in the

propeller bearings into the sea.

We are actively adopting an air-seal-type stern tube sealing system, which has a

better oil leak-prevention mechanism, in all our newly built ships, replacing the

conventional stern tube sealing system that uses lubricating oil.

Air-seal Stern Tube Sealing System

Sea water carried by a cargo ship in dedicated tanks to secure structural hull

strength and maintain adequate draft for a safe non-cargo voyage is called ballast

water. This ballast water is discharged when cargo is loaded. Ballast water contains

aquatic organisms and pathogens originating in the region where it was taken on

board, and these may be discharged together with the ballast water into areas of

the sea where there are no such harmful aquatic organisms and pathogens. This

affects the ecological system and constitutes a serious concern.

An international convention for ballast water treatment adopted in February 2004

requires ships to install ballast water treatment equipment that will meet certain

standards in the future. As an alternative method before the equipment is

developed, exchanging ballast water in the ocean is allowed. We comply with all

local regulations and recommendations provided by the country of the calling port

regarding ballast water exchange.

Appropriate Ballast Water Management

En

vi

ro

nm

en

ta

l

Re

po

rt


Seawater,oil and contaminants from the machinery room

Aquaticorganisms

Ballastwaterexchange

Discharge atloading port

En

vi

ro

nm

en

ta

l

Re

po

rt

Shinwa Chemical Tanker Co., Ltd. Shinju Maru No. 1, which transports LNG, a fuel with very little CO2 emissions

Prevention of Global Warming

Global warming is said to be caused by greenhouse gases such as CO2. Vessels

need to burn fossil fuel such as fuel oil to run, and these emit CO2-containing exhaust

fumes. At present, the only effective way to reduce this CO2 gas is to reduce fuel

consumption. We are taking the following

measures to reduce fuel consumption:

・Use of energy-saving equipment and devices. ・Improving propuls ion per formance by hu l l

cleaning/ polishing of propeller.・Speed reduction and best-route planning in

accordance with changing situations. ・Minimizing fuel consumption per transported unit

with efficient shipping schedules and increased cargo loads.

Before hullcleaning

Before propellerpolishing

After hullcleaning

After propellerpolishing

Exhaust gases from ships contain nitrogen oxides （NOx） and sulphur oxides （SOx）, which cause air pollution, including acid rain.

Regarding NOx, diesel engines with a power output of more than 130 kW installed

on board ships whose construction started on or after January 1, 2000, must comply

with the NOx emission limits specified by the relevant convention. Each of our new

vessels is equipped with a new-model engine with low NOx emissions.

Also, for SOx emission control, the sulphur content of any fuel oil used on board

ships must not exceed 4.5%. We procure fuel oil that meets ISO standards for

restricting SOx emissions.

Prevention of Air Pollution （Prevention of Acid Rain）

To prevent generation of dioxin, incinerators capable of rapidly cooling the exhaust

gas temperature to 200°C are installed in all newly built ships.

Preventing the Generation of Dioxins

Freon and halon are regarded as causes of ozone depletion. Freon was used for

onboard freezing and cooling machinery, while halon has been used in fire

extinguishing systems.

For our new ships, we have adopted freezing and cooling machinery that use

alternatives to Freon.

New installation of halon fire-extinguishing systems has been prohibited since July

1992, and most of our ships are now equipped with CO2 fire extinguishing systems

or high-expansion-foam fire extinguishing systems.

Prevention of Ozone Depletion

Conservation of Air Quality

Fuel Consumption700（kt）

600

500

400

300

200

100

0

（t/kt）16

14

12

10

8

6

4

2

0

15.4 13.8 13.713.6 13.0 13.0

（Fiscal year）1990 2003 2004 2005 2006 2007

MDO HFO

Fuel consumption per unit load （t/kt）

12 13 1012 12463

380 400425 431411

CO2 Emission Volume

（Fiscal year）

1,800（kt）

1,600

1,400

1,200

1,000

800

600

400

200

（%）

100

80

60

40

20

01990 2003 2004 2005 2006 2007

Total CO2

CO2 emissions per load unit（compared to fiscal 1990）

1,409

1,1931,257 1,2811,331 1,351

100.0%

89.8% 88.8% 84.6% 84.4% 89.0%

Traded Cargo Volume

（Fiscal year）

35,000（kt）

30,000

25,000

20,000

15,000

10,0001990 2003 2004 2005 2006 2007

30,16628,434

30,296

32,498 32,32833,695


Provided by Nippon Yuka Kogyo Co., Ltd.

Resource Conservation and Waste Reduction

En

vi

ro

nm

en

ta

l

Re

po

rt

The vessels owned by Shinwa Kaiun that have cross-head engines are being

converted from mechanical to electronically controlled lubricators to reduce the

amount of lubrication and lower cylinder oil consumption.

Cross-head engines use two types of lubricant: cylinder oil in the cylinder liner and

system oil in the crankcase. The system oil undergoes a circulation cycle so that it can

be reused. The cylinder oil, however, cannot be reused because it is burned up inside

the cylinders, and this oil must be fed in constantly for the engine to continue operating.

There used to be mechanical lubricators attached directly to the engine. These would

feed oil at a fixed frequency （once every one or two revolutions of the engine）. Now,

however, electronically controlled lubricators have made it possible to feed oil

accurately and in a way that is appropriate to the main engine's current operational

status. Reducing the wasteful feeding of oil makes it possible to reduce the amount

of lubrication and lower the consumption of cylinder oil. Shinwa Kaiun is actively

engaged in fitting electronically controlled lubricators.

Promotion of Installation of Lubricant （M/E Cylinder Oil） Consumption-saving Equipment

Large ships are ordinarily fueled by residual fuel, which is what remains after gasoline,

diesel oil, and other light components have been extracted from crude oil. In fact they

use a low grade of heavy oil known as heavy fuel oil. This heavy fuel oil contains a

substance known as asphaltene （high-density hydrocarbon） that can agglutinate and

form sludge when the fuel is heated or mixed. Asphaltene is a causal factor in various

problems, such as precipitation in fuel tanks and increased fuel loss, causing

equipment problems when it is caught in strainers, and so on. Heavy fuel oil has

tended to become an even lower-grade fuel in recent years as the demand for light

fuels such as gasoline and diesel oil has increased. Sludge countermeasures have

accordingly taken on increased importance for both economic and safety reasons.

Shinwa Kaiun places fuel additives （sludge dispersants） in the fuel for its ships to

prevent the formation of asphaltene sludge. The purpose is to save energy by

efficient use of fuel and improve safety by reducing sludge.

Use of Fuel Additives （Sludge Dispersants）to Improve Energy-saving Effectiveness


Asphaltene forms sludge

Asphaltene（high-density hydrocarbon）

Asphaltenesludge

Diagram of presumed asphaltene structure

It disperses throughout the HFO and becomes fuel.

Settles at bottom ofHFO tanks and is caught in strainers, causing fuel losses.

Additive （sludge dispersant） added

Additive-free

Heavy fuel oil

NNNVN

Asphaltene sludge is formed by heating or mixing of different types of oil.

The structure of a cross-head engine

Exhaust valve Exhaust

Air supply

Lubricator

Lubrication ports

Piston

Piston rod

Cross-head

Crankshaft

Classroom training in Manila

Environmental Education

Waste segregation in the office

Shoyo Maru of Shinwa Naiko Kaiun Kaisha, Ltd., transporting fly ash for recycling resources

Proper disposal of onboard waste

En

vi

ro

nm

en

ta

l

Re

po

rt

Reduction of power consumption has cut annual power usage at our offices by

1% in comparison with the previous year. Using this as our environmental

s logan, we are making ef for ts day and night to reduce annual power

consumption at our offices, encouraging power savings with such practices as

turning off unused office machines and unnecessary lights.

In fiscal year 2007, however, increased use of computers and air conditioning

resulting from the growth in operations caused by active sales expansion

produced a rise in electric power demand. This resulted in an increase of 1%

over the previous fiscal year. We intend to continue our efforts from the previous

fiscal year to achieve the target.

Reduction of Power Consumption in the Office

For thorough separation of waste generated in offices, we have improved the

arrangement of waste baskets, and are running an in-house campaign to implement

waste segregation in compliance with local regulations. In addition, we promote the

effective use of recyclables: since last fiscal year we have encouraged reusing blank

reverse sides of used paper, and using personal coffee and tea cups instead of

disposable ones.

Office Waste

Various kinds of waste are generated by the crew living on board. Such onboard waste

is thoroughly separated and collected as is done on shore, and is either burned on

board or duly disposed of on shore, except items suitable for ocean disposal after

pulverization, such as food waste. By setting a target for shipboard waste disposed

ashore （an increase of 1% over the previous fiscal year）, Shinwa Kaiun is managing the

volumes and methods of shipboard waste being disposed aboard and ashore.

Proper Disposal of Onboard Waste

The company has formulated and implemented onboard education and training

through On-the-Job Training （OJT） in addition to classroom training for crews. The

plan includes items related to environmental protection, which serves to bring about

seamen's awareness of environmental protection through pre-boarding seminars.

Seamen's Environmental Education

Twice a year, the company dispatches lecturers to hold seminars for Philippine

seamen on leave, holds lectures on the environmental management system and

strives to increase environmental awareness among the seamen.

Environmental Seminar in Manila


Shinwa Kaiun's Environmental Protection Activities

May 2000

October 2000

December 2000

January 2001

September 2001

October 2001

December 2001

May 2002

November 2002

December 2002

April 2003

May 2003

September 2003

November 2003

June 2004

July 2004

December 2004

December 2004

December 2004

June 2005

July 2005

May 2006

June 2006

July 2006

June 2007

Safe Navigation Committee established.

Corporate Philosophy of Shinwa Kaiun Kaisha, Ltd., established.

Regulations regarding avoidance of accidents at sea and accident countermeasures established.

Shinwa Marine Corporation received ISO 9002 certification （Class NK）Safety and Environmental Committee established.

Shinwa Kaiun Group Environmental Statement formulated.

Rules regarding control of inside information and insider trading revised.

2001 Environmental Report published.

Investor Relations Committee launched.

Regulations regarding disasters at sea and other emergency circumstances revised.

ISO 14001 certification received （Class NK）Companies included: Shinwa Kaiun Kaisha, Ltd., Shinwa Marine Corp.,

Shinwa Business Management Kaisha, Ltd., Shinwa Agency Co., Ltd.,

Shinwa Chartering Corp., International Marine Consulting Co., Ltd.

Shinwa Marine Corporation received ISO 9001-2000 certification


Standards of Conduct established.


Established guidelines for use of computer equipment, e-mail, and the Internet.

Compliance Committee established.

Internal audit regulations established.

Shinwa Kaiun Group Environmental Statement revised.


Shinwa Kaiun Group Safe Operation Management Committee launched.

CSR Committee established. Policy for CSR programs formulated.

CSR Report 2006 published.

Policy created for subsidiary representatives to participate as observers in the CSR Committee.

CSR Report 2007 published.

Environmental Management System Organizational Chart

History of CSR Activities at Shinwa Kaiun Group

Management Representative

GOC Officer（Radio and Catering Department）

Chief Engineer（Engine Department）

Chief Officer（Deck Department）

Board of Executive Officers

Secretariat （Marine andSafety Management Group）

Emergency Measures Headquarters

Master

Environmental ProtectionWorking Group

Ship Management & Technical Section

＊Shinwa Marine Corp.　Ship Management Group　Marine Group　Seamen Group

General Management Section

＊General Affairs Group＊Finance and Accounting Group＊Project Group

＊Shinwa Business Management Kaisha, Ltd. 　Shinwa Agency Co., Ltd. 　International Marine Consulting Co., Ltd.　Shinwa Chartering Corp.　Shinwa Marine Corp., Business Group

Remarks◎ : Has primary responsibility for environmental management○ : Has responsibility for environmental management＊ : Organizations in charge of environmental management

Responsible Director

Top Management（President）

［Note: For period after 2000］

ISO14001: 2004 Approval Registration Certificate（Periodic audit completed on May 27, 2008）

En

vi

ro

nm

en

ta

l

Re

po

rt


Internal Audit Team

Safety and Environmental Committee

Shipboard Safety and Health Committee

Operational Section

＊Ore/Bulk Carrier Group＊Ore/Bulk Carrier Group＊Oil/Gas Group

＊Tramp Chartering Group＊Near Sea Group

○General Affairs　Group Leader

◎Marine and Safety　Management Group Leader

Glossary

This is seawater pumped into special tanks to serve as ballast when a ship has no cargo aboard. This maintains suitable draft and stability, and sufficient weight to maintain hull strength. The marine organisms taken aboard ships in ballast water and discharged far from their home waters have often been cited as a negative factor on biodiversity. In February 2004, the IMO adopted the International Conven-tion for the Control and Management of Ships' Ballast Water and Sediments.

Ballast water

Wastewater that collects in the bottom of the engine room, contaminated by fuel oil and lubri-cants that leak out during the normal operation of a ship's engines. It is treated in oil/water separa-tors and the oil and water are disposed of sepa-rately.

Bilge

CFCs are halogenated hydrocarbons containing carbon, fluorine, chlorine, and hydrogen. The word "Freon" is often used as a generic term for CFCs. Because they are colorless, odorless, and non-toxic, as well as thermally and chemically stable, they were widely used as refrigerants, cleaners, solvents, firefighting agents, and aerosol propellants. However, manufacturing of Freon has been prohibited since 1996 because it is an ozone depleting substance. Of the CFCs, Halon is particularly harmful to the ozone layer and its manufacture has been prohibited since 1994.

Chlorofluorocarbons （CFCs）

Engine type that is commonly adopted for large two-cycle diesel engines. For structural reasons, it requires two different lubricants, cylinder oil and system oil.

Cross-head engine

Lubrication oil that lubricates the engine between the piston and the cylinder liner.

Cylinder oil

Dioxins are highly toxic substances that are primarily formed during the incineration of waste, but may also be formed from natural causes such as wildfires and volcanic activity. They can cause cancer, birth defects, immune system suppression, and reproduc-tive abnormalities. Because dioxins are formed when substances broken down at over 800 degrees recombine as they cool, the formation of dioxins can be limited by rapidly cooling exhaust gasses.

Dioxins

The vertical distance between the surface of the water and the bottom of a ship's hull, at any given condition. Normally defined as forward draft, aft draft, draft amidships.

Draft

International Maritime Organization. The IMO is a specialized organization of the UN that researches and establishes international maritime treaties and conventions. The IMO promotes cooperation among the governments of every nation with regard to technological and legal issues bearing on marine transport, including maritime safety, improvement in marine transport technology, prevention of pollution of the ocean by ships, and the abolition of discrimi-natory treatment between countries.

International Maritime Organization （IMO）

This is the international environmental standard established by the International Organization for Standardization （ISO） to guide companies in pursu-ing environmentally responsible business activities. It mandates environmental management policies, organizations and systems, operation, internal audits, and other measures, which are to be continually improved based on the PDCA cycle.

ISO 14001

The PDCA cycle is a system for continuously improving environmental management systems. Using th is cyc le, a company wi l l Plan（set targets and pol ic ies, and create a plan to achieve them）,Do（execute its plan）,Check（verify the outcomes and make adjustments）, Act（make changes and improvements for the next step in the cycle）,and then Plan and so forth again.

PDCA cycle

It is necessary to prevent sea water from entering the ship where the propeller shaft penetrates the ship's hull, and to keep propeller shaft lubricant from leaking into the ocean. In the past, rubber seals and hydraulic pressure were used to prevent the entry of seawater, but the adoption of seals using air pres-sure also prevents the leakage of oil into the ocean.

Stern tube air seal equipment

Filtering device that separates liquids and solids from a mixture of the two.

Strainer

Lubrication oil that lubricates engine bearings and other drive components.

System oil

This is a concept promoted by the UK Ministry of Trade that involves harmony between a person's professional and personal lives. It means maintaining health and happiness without sacrificing either the workplace or the family. In Japan, the Ministry of Health, Labor and Welfare established a study group in 2003, and is working to achieve the accep-tance of this concept through regional governments nationwide. It is also called Life-Work Balance.

Work-life balanceThis is the international standard for quality control and quality assurance established by the ISO. It sets forth the requirements for a quality manage-ment system that extends to organizational man-agement to achieve customer satisfaction and operational improvements.The pursuit of customer satisfaction and improvement efforts through ISO 9001 allows a company to maintain the trust of the public and heighten its competitiveness.

ISO 9001

An atmospheric layer 20 to 25 km above the Earth's surface that is rich in ozone （an allotrope of oxygen）. It absorbs much harmful ultraviolet radiation from the sun, protecting organisms on the surface of the planet. Harm to the ozone layer would allow more harmful ultraviolet radiation to reach the surface, with harmful effects such as skin cancer and conjunctivitis.

Ozone layer

From Reader Questionnaire included in Shinwa Kaiun GroupCSR Report 2007

We thank readers for their cooperation in answering the questionnaire. We will try to answer the points you have raised.

F i r s t o f a l l , we cons ide r counte rmeasu res fo r environmental issues to be a key concern that is, like safe nav igat ion, par t of the foundat ion for CSR act iv i t ies. We intend to continue deepening our awareness of the PDCA cycle still further by setting concrete action indices and repeating the cycle of planning, doing, and verifying improvement measures.

We further intend to realize anew the perspective of transparent information disclosure. At the same time, we hope to convey information f rom a var iety of v iewpo ints to more readers, and g i ve them an understanding of Shinwa Kaiun's activities. To that end, we will endeavor to use language and expressions that people will find more easily understandable.

We intend to take into consideration the views of the readers of this report and other third parties, and incorporate them in our examination of future CSR activities.

●I would like to hear what future measures the company is thinking about taking to address environmental issues.

（Employee family member, 50s, female）●It struck me that this report was created for shippers and other related

parties. When I think that CSR means responsibility to society, however, I feel that it would be better addressed to society at large.

（Person affiliated with the maritime authorities, male）●If ordinary people are the targets of this PR, and not just corporate people,

then I think that the audience will find it easier to understand if the explanations start at a more basic level. （University professor, male）●I think it will convey more to readers if, rather than saying "such-and-such

measures were implemented," the report included more comments from employee perspectives that give a sense of something actually experienced. （Shinwa Kaiun employee, 20s, female）

●I wish the report could have carried more accounts about individual employees, their awareness and their commitment.

（University student, 20s, female）●It seemed to me that every article was factual and objective. The report

should probably include more commentary--evaluations and impressions concerning the facts. （Shinwa Group employee, 40s, male）

R e a d e r C o m m e n t s O u r R e s p o n s e

En

vi

ro

nm

en

ta

l

Re

po

rt


Tel: +81-3-5290-6233 Fax: +81-3-5290-6230

E-mail：[email protected]

h t t p : / / w w w . s h i n w a s h i p . c o . j p

Please direct inquiries regarding this publication to:

CSR Committee Secretariat, General Affairs GroupShinwa Kaiun Kaisha, Ltd.

KDDI Otemachi Bldg., No. 8-1 Otemachi 1-Chome, Chiyoda-kuTokyo, Japan 100-8108

SHINWA KAIUN KAISHA,LTD.

❶　How well did you understand Shinwa Kaiun Group’s thinking on CSR?　　□ Understood　□ Partially Understood　□ Did not understand

❷　How would you evaluate Shinwa Kaiun Group’s CSR initiatives?　　□ Excellent　□ Fair　□ No opinion　□ Some elements unsatisfactory　□ Poor

❸　Please evaluate this CSR report.　　Quality of content:　　 □ High　　　　　□ Medium　　　　□ Low

　　Quantity of information:　□ Plentiful　 □ Sufficient　　　□ Insufficient

　　Number of pages:　　　 □ Too many　　　□ Usual number　□ Few

　　Readability:　　　　　　□ Very readable　□ Readable　　　 □ Not readable

　　Clarity:　　　　　　　　　 □ Very clear　　 □ Clear　　　　　□ Unclear

　　Honesty:　　　　　　　□ Very honest　　□ Honest　　　　 □ Not honest

❹　Which parts of the report did you find particularly interesting? （Select as many as you like）　　Social Report　　　　　 □ The Shinwa Kaiun Group’s Approach to CSR

　　　　　　　　　　　□ Stakeholders Supporting Shinwa Kaiun Group　

　　　　　　　　　　　　　□ Initiatives for Customer and Suppliers　

　　　　　　　　　　　　　　□ Initiatives for Shareholders and Investors

　　　　　　　　　　　　　　□ Initiatives for Employees　□ Initiatives for Society

　　Environmental Report □ Shinwa Kaiun Group Environmental Statement　　

　　　　　　　　　　　　　　□ Environmental Management Programs

　　　　　　　　　　　　　 □ Ensuring Safe Navigation □ Preservation of the Marine Environment

　　　　　　　　　　　　 □ Conservation of Air Quality □ Resource Conservation and Waste Reduction

　　　　 □ Environmental Education　

　　　　　　　　　　　　　 □ Shinwa Kaiun’s Environmental Protection Activities　

　　Which article interested you the most? （Page number :　　　Sub-title :　　　　　　　　　　　　　）

❺　Please tell us what you’d like to know more about, and make any other comment you wish.

❻　Please identify your relationship to Shinwa Kaiun Group or reason for reading this report.　　□ Customer　□ Shareholder or investor　□ Financial institution　

　　□ CSR or environmental manager for a company or organization　□ NGO/NPO

　　□ Research or educational institution　□ Student　□ SRI Index or other evaluative body　　

　　□ Shinwa Kaiun Group employee or family　□ Other （　　　　　　　　　　　　　　　　　　　）

❼　Would you like to receive our new CSR report?　　□ Yes　□ No

Please fill in the following information as you feel comfortable providing.

Name　　　　　　　　　　　　　　　　　　　　　　　　　 Gender　□ M　□ F　　Age　　　　

Address　　　　　　　　　　　　　　　　　　　　　　　　　

Occupation （Name of company or school, etc.）　　　　　　　

Department and position

Thank you very much for your assistance.Privacy policy:The personal information gathered from this questionnaire will be used only for （1） evaluation and analysis of our CSR report, and

（2） to provide next year’s reports to those who request them. Your completion of this questionnaire indicates your consent to these conditions.

FAX:＋81-3-5290-6230 Shinwa Kaiun Kaisha,Ltd. CSR Committee Secretariat

Thank you for your reading Shinwa Kaiun Group’s CSR Report 2008.Please take a minute to give us your opinions of the report.

Safe Navigation and Global Environmental Protection to ... · coastal shipping business and...

Documents

Transcript of Safe Navigation and Global Environmental Protection to ... · coastal shipping business and...